JP: Unemployment Rate

Thu Mar 29 18:30:00 CDT 2018

Consensus Actual Previous
Level 2.6% 2.5% 2.4%

Japan's seasonally-adjusted unemployment rate picked up from 2.4 percent in January, its lowest level since April 1993, to 2.5 percent in February, just below the consensus forecast of 2.6 percent.

The number of employed persons increased by 1,510,000 (2.3 percent) on the year in February, up from an increase of 920,000 (1.4 percent) in January, while the number of unemployed persons fell by 220,000 (11.7 percent) on the year after dropping 380,000 (19.3 percent) previously. Japan's participation rate was at 60.8 percent in February, up from 60.5 in January and from 59.6 twelve months earlier.

Today's data shows Japan's labour market continues to improve, with very strong employment growth helping to boost participation and keeping unemployment close to multi-decade lows. Officials at the Bank of Japan expect this will eventually translate into stronger wages growth and help push inflation towards its 2.0 percent target, though this is still expected to be a gradual process. Household spending data scheduled for release next week will include updated information on growth in real household income.

The Unemployment Rate measures the number of unemployed as a percentage of the labor force. The unemployment rate is part of the Labour Force Survey which also includes employment data.

The unemployment rate and employment change are carefully monitored. The employment data show the number employment along with the change in employment for the previous year. Monthly changes in employment also help clarify whether businesses are hiring. The unemployment rate is the percentage of the labor force that is unemployed. A lower jobless rate translates into more income earning workers and greater consumption. Increased spending is a positive for consumer oriented economic growth, something that has lagged in Japan.

By tracking the jobs data, investors can sense the degree of tightness in the job market. If wage inflation threatens, it's a good bet that interest rates will rise; bond and stock prices will fall. No doubt that the only investors in a good mood will be the ones who watched the employment report and adjusted their portfolios to anticipate these events.